Temporary versus Permanent Legislation
Chapter 7: Sponsor’s age
As we have seen in the previous chapter, non-permanent legislation is more likely to become law than permanent legislation, a proxy for incurring comparatively lower transactions cost for its passage. Legislators, especially older legislators nearing retirement, would presumably prefer lower-cost temporary legislation if they receive compliance benefits for a shorter time and smaller magnitude. Instead, if they prefer higher-cost permanent legislation, they may receive an immediate transfer from interest groups of sufficient magnitude, or a further benefit from legislating compliance outcomes beyond their tenure, which we refer to as a legacy benefit. To the extent that permanent legislation increases total compliance over time, legislators who pay for legacy benefits may prefer to incur additional costs for its passage, even when the alternative cost structure of temporary legislation provides transactions cost savings in the short to medium term. In order to test this theory, we test for a causal relationship between the selection of a permanent timing rule and the age of the bill’s sponsor.
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